Federal Government Will Continue to Collect Excise Tax.

The IRS released a statement addressing the excise tax levied under § 4251 of the Internal Revenue Code. This section implements the tax on telecommunications services. There have recently been court cases that address this statute and may conflict with it. In Office Max Inc. v. United States, Office Max received a refund of their federal excise tax when they argued their phone service was not based on distance (except for local or international calls). The IRS release says that the excise tax will continue to be levied and nonpayment of the tax may result in interest and penalties. If a party believes they are entitled to a refund, they may file administrative claims with the IRS. For an update on this news item, click here. (Internal Revenue Bulletin: 2004-35 August 30, 2004, Office Max, Inc. v. United States, 309 F. Supp. 2d 984 (N.D. Ohio 2004).

Posted on October 22, 2004